$US closes soft

Press, 10 November 1986, Page 28

$US closes soft

NZPA New York The American dollar ended another turbulent week on a decidedly soft note amid lingering worries about the sustainability of the United States economic expansion despite a robust 298,000 gain in non-farm jobs in October. “While some people may have viewed the non-farm data as bullish, there are still a lot who are sceptical,” said a trader at a leading bank. “We may just be robbing growth from the future.” . After shooting up to 2.0750 Deutsche marks shortly after the job numbers were released on Friday, the dollar drifted down to 2.0590/00 DM at the close. Thursday’s finish was 2.0610/20.

The dollar also fell to

162.90/00 yen and to 1.7160/ 70 Swiss francs from 163.10/ 20 and 1.7180/90 respectively at Thursday’s close. Although October’s nonfarm job gain was much higher than expected and September’s 107,000 rise was revised up to 165,000, economists pointed out that many of the new jobs were only part-time and that much of the over-all increase was in the services rather than the industrial sector.

As a result, it came as little surprise that average workweek and overtime hours in the key manufacturing sector both declined in October.

"The employment report was by no means strong across the board,” said a trader.

Another factor halting the

dollar’s advance was stiff technical resistance at 2.0750 DM, dealers said.

“this was a particularly strong chart point to get through,” said a currency analyst, adding that 2.06 DM was also a stubborn support level on the way down. Apart from the Veterans’ Day holiday in the United States tomorrow, there will be no major fresh news on the U.S. economy until next Friday when latest retail sales, industrial output and producer prices numbers will be released.

Sterling was subject to relatively minor fluctuations during Friday, mainly mirroring the dollar’s swings. The pound ended at $U51.4305/15 after opening at 5U51.4230/40 and closing at $U51.4265/75 on Friday.

The Canadian dollar wound up little changed against its U.S. counterpart, firming marginally to JU51.3878/82 from $U51.3883/88 on Thursday.

According to figures provided by Morgan Guaranty Trust Company, the dollar’s trade-weighted value at midday was 4.2 per cent above average market rates in 198082, compared with 4.1 per cent on Thursday.